The US company Wolfspeed wanted to build a new semiconductor factory in Saarland. Now the project partner ZF is probably withdrawing and the project is about to end.
The automotive supplier ZF has apparently decided to no longer participate in the planned chip factory in Saarland. This could be the death knell for the 2.75 billion euro project led by the US group Wolfspeed. This is reported by the “Handelsblatt”, citing government and industry circles. When the plans were presented at the beginning of 2023, Scholz was happy about the “return of the industrial revolution”.
The plan was to build a new factory for power-saving chips made of silicon carbide by 2027. The research and development center was to be built in Ensdorf, Saarland, on the site of a former coal-fired power plant. The automotive supplier ZF wanted to invest 170 million euros.
However, things are now looking bad for the major project. The semiconductor manufacturer Wolfspeed has been in the red for a long time. The stock has collapsed by more than 90 percent in the past two years. CEO Gregg Lowe hasn’t commented on the project for months.
Just last week, Wolfspeed’s financial situation suddenly improved. The company expects a grant of $2.5 billion in fresh money from the American government, investment funds and a tax refund. Lowe announced that it would use the funds for “domestic production” and invest the money in two new plants in the US states of New York and North Carolina. There was no mention of Germany.
Both Wolfspeed and ZF left inquiries about the future of the major project unanswered. A withdrawal by the German auto parts manufacturer would not be surprising, as the company is doing poorly. The group recently announced that it would cut up to 14,000 jobs in Germany by the end of 2028. The entire auto industry is having problems with the transformation to electromobility, but ZF is being hit particularly hard. The Lake Constance company has become heavily indebted due to investments in new technologies and has to pay more than half a billion euros in interest every year, reports the “Handelsblatt”.
The US semiconductor manufacturer Wolfspeed and ZF presented the chip factory in Ensdorf, Saarland, in February 2023. The factory should be “the world’s largest and most modern factory for silicon carbide semiconductors,” said Wolfspeed boss Gregg Lowe at the time. The two companies should also receive state funding for the settlement, according to media reports, half a billion euros.
At the announcement, Chancellor Olaf Scholz (SPD) and Economics Minister Robert Habeck (The Greens) were enthusiastic. The plant was considered one of the few successful projects in Europe’s slow race to catch up in chip production. Germany’s ambitions to bring chip production into its own country are now facing the next setback. In September, the ailing US company Intel announced that it would put construction on a multi-billion dollar factory in Magdeburg on hold for years.